Could war in Iran spark a renewed case for renewable energy?

The war in the Middle East has sent shockwaves through energy markets. Over the past two weeks, oil and gas prices have been on a bit of a rollercoaster: spiking, falling, then climbing up again. That’s all to say, fuel costs are pretty volatile and vulnerable in the face of geopolitical conflict.

But what about clean energy? Could a widening war push countries to reinvest in renewables?

To help answer those questions, “Marketplace Morning Report” host Sabri Ben-Achour spoke with Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University. The following is an edited transcript of their conversation.

Sabri Ben-Achour: Fossil fuels are clearly and notoriously vulnerable to geopolitical shocks. Does this shock in particular strengthen the case for renewable energy?

Jason Bordoff: I think this shock today is a reminder that oil and gas is priced in a global market. And one of the best things that you can do to insulate your economy to volatile oil and gas prices that are exposed to geopolitical risk is to reduce how much you use in the first place. And one way to do that is to electrify more of your economy and then try to produce more of that electricity with domestic sources — renewables, could be nuclear power, and for some parts of the world, it's coal.

Ben-Achour: Are renewables actually more secure than fossil fuels, or do they just come with a different set of geopolitical risks?

Bordoff: The eventual economy that might have a lot more low-carbon energy comes with a different set of geopolitical risks. That doesn't mean we shouldn't have a transition, but we need to anticipate what those risks are and try to mitigate them. And one of the most significant is the fact that so many of the technologies you need for renewables and other forms of low-carbon energy, China has a 70, 80, 90% dominant position in many of those technologies.

Ben-Achour: What do we do about that? I mean, how do we deal with that?

Bordoff: Try to diversify. That's always been the hallmark of energy security. Policies to build more domestic capacity, which both sides of the aisle have put in place industrial policy to do. And then buffers and resilience. The Trump administration has just announced it's going to try to build a strategic stockpile of critical minerals, the way we have for oil. And depending on how that's done, that could be a useful thing to do.

Ben-Achour: After Russia's invasion of Ukraine in 2022, the EU sped up investment in renewable energy. Do you think we will see something like that happen again this time?

Bordoff: I think we probably should and might see something more significant to really take a transition toward a more electrified economy and to do much more with energy efficiency. We should remember that the largest reduction in fossil fuels, as a share of the economy, came in the decade after the Arab oil embargo, not in the decade after the Paris Agreement. And sometimes national security and energy security concerns can be a more powerful driver of policy action than environmental ones.

Ben-Achour: Yeah. On the flip side, some European countries responded to that 2022 energy crisis by turning back to coal rather than clean energy, could we see more of that?

Bordoff: I think we will see more of that, particularly in Asia. And I think there's a timeframe, there's a temporal dimension to this. In the near term, you got to do what you need to do to make sure that energy is available to people. You can heat homes. Lives are at risk if we don't have energy. And emergency responses may include coal and may need to include coal. The question is the longer-term lessons we take. I think lots of countries are going to look to reduce their imports of energy and reduce their exposure to volatile oil and gas markets that come with geopolitical risk.